Dubai firm joins top rank of jet lessors
DAE's acquisition deal would add over 200 planes to its fleet and more than double the size of its current business.
Published: Sun 20 Aug 2017, 9:00 PM
Last updated: Sun 20 Aug 2017, 11:31 PM
Dubai Aerospace Enterprise, or DAE, propelled itself into the top ranks of global aircraft lessors following a multi-billion dollar acquisition of Dublin-based Awas, the industry's tenth biggest firm.
DAE, a Dubai government-controlled aircraft leasing and maintenance company, said on Sunday it had completed the acquisition deal that would add over 200 planes to its fleet and more than double the size of its current business.
DAE said in July that it had raised $2.3 billion to finance the acquisition from private equity firm Terra Firma Capital Partners and the Canadian Pension Plan Investment Board.
Operating for more than 30 years, Awas has a fleet of 263 owned, managed and committed narrow and wide-body aircraft, including a pipeline of 23 new aircraft on order to be delivered before the end of 2018. Awas currently provides customised aviation solutions to over 85 airline customers in over 45 countries.
The combined company will have an owned, managed and committed aircraft fleet of over 400 aircraft with a total value of over $14 billion. It will serve over 110 airline customers in over 55 countries from offices in Dubai, Ireland, Singapore and the United States.
The deal makes DAE one of the world's top aircraft lessors behind the likes of General Electric and AerCap.
DAE will use the brand name 'DAE Capital' to conduct its aircraft leasing business, the company said in a statement announcing the finalisation of the strategic deal that was first announced in April, and was expected to be closed in the early part of the third quarter.
Awas is the latest asset to be sold in the rapidly consolidating global aircraft leasing industry whose top 50 lessors had a fleet value of $256 billion in 2016, according to consultancy Flightglobal. The sector is seeing increased investment from players in emerging markets such as China, which were also in the running for Awas.
"This acquisition of the best-in-class Awas platform provides DAE with an enhanced market position," DAE chief executive Firoz Tarapore said.
"This combined with our capital strength and our committed long-term ownership will allow us to provide a more comprehensive range of aviation fleet and financing solutions to our clients across the globe. The senior management team, representing the best of Awas and DAE, is now in place and focusing on the seamless integration of the businesses," he said in the statement.
The deal increases DAE's number of aircraft leasing customers to include 117 airlines in 57 countries from offices in Dubai, Dublin, Singapore, Miami, Bellevue and New York; and will provide over three decades of experience in the global leasing market.
Tarapore was quoted as saying in June that the company would consider a jet order of more than 20 aircraft once the deal closed, and that he was interested in Airbus, Boeing and ATR aircraft.
Saj Ahmad, an analyst at London's StrategicAero Research, said DAE Capital's procurement of Awas now propels the group into the top tier of aircraft leasing giants.
"This is a brilliant and smart move by DAE and one that will derive it a lot of long term success and financial stability," Ahmad told Khaleej Times.
He said the last decade has seen exponential growth in leasing activity as airlines look to harness the fuel efficiency of new generation airplanes and while Airbus and Boeing have huge backlogs, getting deliveries has been the challenge.
"But where leasing giants like DAE exist, they have been able to get those airplanes faster and rent them out.
"Given that DAE was always set up with a view to demonstrate the robustness not just of the GCC market, the entity now has a brilliant opportunity to seek new revenue generating markets and look to new campaigns to buy more airplanes," said Ahmad.